Railways has come under fresh pressure to further hike passenger fares, at least in a small way, and revise freight rate in the wake of virtual decontrol of diesel price but whether Railway Minister P K Bansal bites the bullet in the Rail Budget remains to be seen.

Bansal is likely to announce a slew of passenger-friendly measures such as improvement in catering service, development of stations and launching of about 100 new trains in his maiden budget on February 26.

All attention will be, however, on passenger fares as Bansal had recently told reporters that the increase in diesel price following the fare hike has negated the additional revenue which Railways expected to mop up by Rs 3,300 crore.

Cash-strapped Railways had effected passenger fare hike across the board by 21 per cent on January 22, aiming to mop up an additional revenue of Rs 6,600 crore.

Bansal has had several round of discussions with Prime Minister Manmohan Singh, Finance Minister P Chidambaram and the Planning Commission in connection with the Rail Budget. He is also understood have discussed the possibility of fare hike

with Congress president Sonia Gandhi.

However, sources said a section inside the Congress is not inclined towards effecting another round of hike as general elections are not far away.

The budget could also see some tinkering in freight rates despite resistance from the industry in the wake of slow economy growth.

Bansal is likely to announce the proposal for setting up of Rs 1,000 crore MEMU (Mainline Electric Multiple Unit) coach factory in Rajasthan to cater to the growing demand of more local and suburban trains. Railways will sign an agreement with BHEL and Rajasthan government soon for manufacturing about 400 coaches in a year.

Aiming to put rescue and restoration work during accidents on fast track, the Rail Budget 2013-14 will announce procurement of two high-speed self-propelled accident relief trains (SPART).

The SPART will enable rescue equipment to reach the accident site faster and help speedy rescue and restoration work.

Railways is likely to miss the revenue target of Rs 1.35 lakh crore for the current fiscal as the total earning for the 10 months from April, 2012, to January, 2013, has been Rs 1,01,223 crore, which means it needs to earn Rs 34,000 crore in the next two months to meet the target.

Despite the freight hike in March 2012, Railways is set to miss its freight earning target of Rs 89,339 crore